Capacity Utilization Rates

Friday, November 18, 2005 | 09:40 AM

I'm travelling today, so light posting.

But check out this fascinating chart regarding Capacity Utiliatization Rates, via Chart of the Day:


20051118

20051118b

COTD writes: 

"While the Asian economic boom has pushed up commodity prices, those increases have yet to translate across the board since low cost Asian labor in conjunction with artificially low Asian currency exchange rates have made it difficult for US workers to compete. A low capacity utilization rate suggests that labor is not yet in a strong position to demand higher wages and when it comes to inflation, labor costs tend to play a more significant role than commodities. Today's chart illustrates that a below average capacity utilization rate has tended to coincide with a declining core inflation rate."

Kinda clarifies why private sector job creation has been so anemic . . .

Friday, November 18, 2005 | 09:40 AM | Permalink | Comments (11) | TrackBack (0)
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Comments

So, the "big sucking sound" from Asia keeps wages low and so inflation is tamed in spite of high commodity prices? Is this the reason why the global economy is behaving in such a classy manner in spite of the exceptionally high price of oil? Please clarify when you get back. Thanks.

Posted by: Fede | Nov 18, 2005 9:51:37 AM

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